Check out article in Spring Magazine: https://springmag.ca/canada-pension-plan-funds-war-and-climate-change
To write your own letter to the CPPIB go HERE.
The Canada Pension Plan (CPP) manages $539 billion on behalf of over 21 million working and retired Canadians, making it the seventh largest pension plan in the world. The CPP Investment Board (CPPIB) however is accountable first and foremost to the federal and provincial governments, not the contributors and beneficiaries.
A webinar “What is the CPPIB Really Up To?” was hosted earlier this year by the Canadian Foreign Policy Institute, Just Peace Advocates, World BEYOND War and several other organizations. It considered how over the years, the CPPIB has moved from real assets to equities, and from investments in Canadian infrastructure to foreign investments, and its heavy investments in companies that manufacture weapons, are complicit in human rights and international law violations and fossil fuels.
The meetings according to the CPPIB were held so the public could learn “directly about the strategy for investing the CPP Fund and how it is performing and have the opportunity to ask questions to our senior executives.” However, no mention was made that the CPPIB is actually required by law under s.52 of the CPPIB Act to hold these public meetings every two years.
The 2022 meetings were all held at 12 noon local time, with the virtual meeting being at 12 NOON ET. The regional meetings were all in downtown hotels. The meetings only lasted an hour.
Only about 20-25 people attended each of the regional meetings. Perhaps this was because the meetings were not well publicized, and/or the timing and location made it difficult for working people to attend. There was no information provided about how many people were on the live virtual meeting, despite the question being asked. It seems that the legal requirement was met but not necessarily in a way that easily engaged contributors and recipients of the CPPIB.
Over the years, individuals and organizations concerned about the CPPIB’s investments in weapons manufacturers, Israeli occupation, fossil fuels, extraction and other concerning enterprises, have attended these CPPIB’s bi-annual meetings in an attempt to raise concerns but have seldom received answers.
In 2022, this was again the case with individuals attending at least six of the regional meetings (Vancouver, Regina, Winnipeg, London, Halifax, St. John’s) and the national virtual meeting to ask similar questions asked over the last decade. There was plenty of space at the regional meetings to ask questions, with questions about the CPPIB investment in the weapons industry, Israeli international law violations and fossil fuels dominating. But there were few answers.
Criticism of CPPIB’s unethical investments was the main theme of the stakeholder meetings across the country, although these questions were ignored during the virtual meeting.
Despite a promise in March 2021 to undertake a review of the companies deemed by the UN to be complicit with illegal Israeli occupation, the CPPIB officials seemed surprised about questions asked at a number of sessions about the status of this review. They however did offer that they were doing a “deep dive” into investments related to Uyghur’s.
The message at the 2022 meetings to the CPPIB was consistent that its investments in arms manufacturers, fossil fuels, and companies complicit with international law violations destroy our future, rather than secure it. However, the CPPIB maintained that the most effective is to work with companies rather than divest from them, for example referencing the importance of the fossil fuel industry’s knowledge in helping to transition to green energy.
The CPPIB did however 2019 divest based on reputational risk from CoreCivic and Geo Group, two American prison companies despite the CPPIB suggesting during the recent round of meetings that divestment doesn’t work, while active engagement as shareholders does work.
The CPPIB officials said ESG (Environmental, social, and corporate governance) is important to determine investments, citing the concerns about Russian companies ESG parameters going back ten years ago when CPPIB began aggressively pursuing foreign investments and this resulted in CPPIB not investing in Russian owned companies. One would question how weapons manufacturers or companies which have been deemed by the United Nations as violating international law could have an acceptable ESG rating.
When asked about investments in China, Graham spoke about the importance of geo-political factors and that these are top of mind in the CPPIB global investment considerations, but highlighted the need to have diverse investments in emerging markets, and did not specifically answer whether Canada has investments in companies from China, although the March 31, 2022 annual report shows 244 foreign equity companies and 35 real estate companies from China as well MSCI China global equity and a number of private equity investments. There are no investments showing from Russia in the March 31, 2022, year-end report. Graham indicated he would have to get back on any investments in the Ukraine, although my check of the 2022 year-end report shows none.
CPPIB chair Heather Munroe-Blum mentioned several times her leadership in moving CPPIB from a passive Canadian investor to an active global investor, and the “deep dives” that are done to look at geopolitical and other risks. Indication was that the CPPIB is sustainable for 75 years.
When questioned further about the decrease in Canadian investment, indication was that Canadian investments are “overweight” making up about 15% of the total portfolio, while Canada makes up about 3% of world’s gross production.
However, it seems that diversity that Graham said is the hallmark of the CPPIB investment strategy is not present in its Canadian investments, with one company WSP dominating the Canadian portfolio. In 2021, WSP made up more than one-half of the CPPIB’s Canadian portfolio value, and since then CPPIB fair market value investment in WSP has increased. As written in Canadian Dimension in September, a report was made to the United Nations High Commissioner for Human Rights calling for Montréal-based WSP Global Inc. (WSP) be included in a UN database of businesses operating in illegal Israeli settlements. WSP is a Montreal based engineering professional services firm that has been contracted forplanning, building and maintaining the Jerusalem Light Rail (JLR) system, an Israeli public tramway that contributes to the maintenance of illegal Israeli settlements in occupied and annexed East Jerusalem.
When asked about conflicts of interest including CPPIB board members that are members of fossil fuel companies, Munroe-Blum explained that the CPPIB chooses for expertise and respect of the CPPIB mandate, and that the organization is sophisticated and has a “built in instinct” that allows it to manage for conflict of interest.
The CPPIB has $21.72 billion invested in fossil fuel producers alone and over $870 million in global weapons dealers. This includes $76 million invested in Lockheed Martin, $38 million in Northrop Grumman, and $70 million in Boeing. At least seven percent of the CPPIB investment are in companies complicit with Israeli war crimes, including investments in 11 of the 112 companies listed in the UN Database as complicit with Israeli violations of international law.
Graham and Munroe-Blum told the November 1st virtual national attendees several times how CPPIB had been given a top global pension score for transparency. There is indeed detailed information available on the CPPIB website. The CPPIB indicated they would be answering all questions asked that were not responded to during the November 1st meeting, so we hope we will be hearing concrete responses to these and other questions that were asked.
While the CPPIB claims to be dedicated to the best interests of CPPIB contributors and beneficiaries, it would seem based on the recent meeting that the CPPIB is extremely disconnected from the public and operates as a professional investment organization with a commercial, investment-only mandate.
To write your own letter to the CPPIB go HERE.